Bitcoin (BTC) is experiencing a period of heightened volatility, bouncing back from lows of $91,000 earlier this week to its current position around $96,400. This price swing coincides with a massive $9.4 billion options expiry on Friday, November 29th, injecting uncertainty into the market’s next directional move.
Analysts Divided on Bitcoin’s Future Trajectory
Experts are split on the immediate future of Bitcoin. Historically, a strong correlation exists between Bitcoin and the Global M2 money supply. However, recent data reveals a possible slowdown in the growth of the global M2, potentially leading to a Bitcoin price pullback below $90,000.
Technical analysis also paints a mixed picture. Rekt Capital, a popular analyst, warns of a potential drop back to $91,000 if Bitcoin fails to close a daily price above a key resistance level. Conversely, Crypto analyst Ali Martinez identifies a crucial demand zone at $93,580, where a significant number of wallets collectively hold a substantial amount of Bitcoin. Maintaining this support level is crucial to prevent further price corrections, suggests Martinez.
Thanksgiving Rally or Technical Rebound?
Martinez also predicts a potential “Thanksgiving rally” for Bitcoin, highlighting a short-term technical pattern that could propel the price back towards its all-time high of $99,000. This optimism is echoed by technical indicators, suggesting a potential rebound.
Institutional Investors Take a Breather
However, cautionary signs also emerge. Institutional investor interest, as measured by inflows into Bitcoin ETFs, has slowed down significantly. BlackRock’s Bitcoin ETF, IBIT, for instance, witnessed zero inflows for two consecutive days. This hesitancy reflects a wait-and-see approach from major players, potentially impacting market momentum.
Options Expiry Adds Fuel to the Fire
Friday’s options expiry carries significant weight, with nearly $10 billion in Bitcoin options contracts set to expire – a substantial increase compared to the previous week. While the put/call ratio suggests a slight bias towards bullish calls, the max pain point rests at a concerning $80,000.
Open interest, which represents the total value of unexpired options contracts, is heavily concentrated at the $100,000 strike price. This hefty open interest emphasizes the market’s focus on this critical level. With December’s year-end expiry looming large, significant market reshuffling is expected in the coming weeks.
At the time of writing, Bitcoin is trading at $96,198 with a lower daily trading volume of under $50 billion. Bitcoin options volume has also dropped significantly, while liquidations have surged.
The next few days will be crucial for Bitcoin’s price trajectory. With a massive options expiry, conflicting technical signals, and institutional wait-and-see approach, the market remains highly volatile. Buckle up, as Bitcoin navigates a path with both potential upside and downside surprises.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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